A Frontrunner Shows the Financial Promise of Wood Pellets

A 500,000 metric ton pellet production facility under construction in Virginia, and the $90 million it will cost to complete the project says a lot about the positive link between economic development and wood pellets.

The frontrunner for the 2013 Groundbreaker of the Year award, a title we gave out for the first time at the 2012 International Biomass Conference & Expo earlier this year in Denver, has to be Enviva LLC’s pellet production facility in Southampton, Virginia. At least if Michael Johnson, Southampton County administrator, was choosing the winner. During Enviva’s groundbreaking ceremony in July, Johnson called the now under construction 500,000 metric ton per year pellet facility the biggest economic development in the county over the past 20 years.

Johnson’s assessment of the pellet facility has to be welcome words to those who live in the region, and of course, for those who work for Enviva. But what about those who don’t’?

Elizabeth Woodworth, director of marketing and communications at Enviva, provided insight to help answer that question, insight I believe points out the financial promise related to the wood pellet industry at the moment, even in a time when wind energy remains aided by tax incentives and natural gas is priced as cheaply as it is.

“The future is extremely bright,” she said (what else would she say right?). But, she went on to explain. “Europe’s demand for products like ours is expected to grow three to five times over the next several years. Many European nations continue to build support mechanisms for biomass into the frameworks of their renewable energy action plans.”

The pellet supplier’s current customer’s, she said, are primarily major utilities in Europe. “With one of the most extensive commercial forestscapes in the world, increasing timber volumes and a culture of sound forest management practices, the U.S. forest industry is well-equipped and well-positioned to be a reliable, professional major supplier to the wood biomass market,” she said.

Why should we believe Woodworth? Because when this facility begins operations, it will be the fifth wholly-owned wood pellet facility operated by the company, in addition to a state-of-the-art pellet terminal the company operates (and uses to export their product) on the Elizabeth River. That is a lot of time, money (the new pellet facility will cost roughly $90 million) and effort put towards wood pellets.